Proposition to Curb Budgetary Waste

I got this idea during class today when the professor was blabbing on and on about bureaucracies in her monotone voice. Is it feasible?

Many government agencies are infiltrated by red tape so much so that their abilities to provide the services they were created for are unlikely at best. Others make sure to use every dime of their budget so that when legislators craft the new budget there isn't a decrease, and possibly an increase in the budget.

Sure, fiscal conservatism is a great thing, but it is hardly embraced in today's age for the fact that it does not account for the emotional part of policy. People don't like being a number.

Hopefully this addresses those weaknesses a little better.

Part 1: Cutting of Duplicate Departments
-The easiest move for legislators to make is to simply cut out departments who replicate the same area of another department. Cuts are based on performance, and the properties used by former agencies would be sold to finance the transition.

Part 2: Freeze Department Budgets
-The strategy in this move is to use time, limits, and investment (which I will get to later) to increase efficiency in handling constituencies needs. Quasi socialism isn't inherently bad, people simply want whatever works.
-All departments would be given notice that their budgets would freeze, and not be re-adjusted for at least 25 years, and the program would work in 25 year periods.
-In essence, the agencies take on living characteristics where they must evolve or die. Automation, proper use of technology, and merit based hiring by necessity becomes the standard.

Part 3: Offer Rewards to Agencies that Consistently Operate Under Budget
-As described above bureaucracies use every cent they are allocated for an entire list of reasons.
-For agencies who operate under budget their difference will be used by the fed to loan in place of regular Fed created funds. Interest will be gained, and that gain will be given back to the agency annually.
-This strategy does two things, operate as an inflationary control and give agencies the ability to fulfill their duties more efficiently as best as they can.

Concerns:
-Government agencies may not to be able to fulfill every single person's wish.
+By operating like a business government agencies compete with the private sector to the level that a company will be able to service all customers possible. The government agencies will not have total advantage as their budgets are somewhat stagnant unlike their private sector counterparts who can deficit spend if they wish.
-Will oversight truly be effective?
+Voters like consumers in the market will determine if they wish to keep the legislators with the duties to oversee the agencies in or out of the office

Lastly:
With an almost total limit on all but a few agencies there will exist a positive situation where tax rates actually decrease. This will reflect the growth of the economy and the increased level of revenue. People will be left with paying less for services which provide more.

I think it is actually pretty decent policy, my only qualm is that a budget freeze restricts the government's ability to react to changing situations, but that could be remedied by allowing Congress to vote on budget adjustments.

I'm bummed that you're posting now, because I am totally swamped at the moment with an International Relations paper.

__________________I can't believe how strange it is to be anything at all

It is no crime to be ignorant of economics, which is, after all, a specialized
discipline. But it is totally irresponsible to have a loud and vociferous opinion
on economic subjects while remaining in this state of ignorance.
--Murray Rothbard

I think it is actually pretty decent policy, my only qualm is that a budget freeze restricts the government's ability to react to changing situations, but that could be remedied by allowing Congress to vote on budget adjustments.

I'm bummed that you're posting now, because I am totally swamped at the moment with an International Relations paper.

Part 1: Cutting of Duplicate Departments
-The easiest move for legislators to make is to simply cut out departments who replicate the same area of another department. Cuts are based on performance, and the properties used by former agencies would be sold to finance the transition.

Politicians gain power by expanding the size of government and increasing its influence in our lives. Reagan talked a good game about small government but couldn't even eliminate a single agency. For example the department of education, which he pledged to abolish, was much bigger when he left office than when he came in. How would these kinds of cuts be accomplished in the current political atmosphere?

Quote:

Originally Posted by I love Impulses

Part 2: Freeze Department Budgets
-The strategy in this move is to use time, limits, and investment (which I will get to later) to increase efficiency in handling constituencies needs. Quasi socialism isn't inherently bad, people simply want whatever works.
-All departments would be given notice that their budgets would freeze, and not be re-adjusted for at least 25 years, and the program would work in 25 year periods.
-In essence, the agencies take on living characteristics where they must evolve or die. Automation, proper use of technology, and merit based hiring by necessity becomes the standard.

Why would the agencies evolve under a 25 year plan? What would prevent the bureaucrats from simply sitting on top of their stagnant agencies to protect their dwindling power bases?

Quote:

Originally Posted by I love Impulses

Part 3: Offer Rewards to Agencies that Consistently Operate Under Budget
-As described above bureaucracies use every cent they are allocated for an entire list of reasons.
-For agencies who operate under budget their difference will be used by the fed to loan in place of regular Fed created funds. Interest will be gained, and that gain will be given back to the agency annually.
-This strategy does two things, operate as an inflationary control and give agencies the ability to fulfill their duties more efficiently as best as they can.

What kinds of rewards would be offered? Would you offer bonuses to the directors of these agencies? Wouldn't you be giving them an incentive to cut costs and provide fewer services so that they can operate under budget and be given rewards?

__________________
A is A. It is what it is.

"Racism is a doctrine of, by and for brutes. It is a barnyard or stock-farm version of collectivism, appropriate to a mentality that differentiates between various breeds of animals, but not between animals and men." - Ayn Rand.

Some questions:
Politicians gain power by expanding the size of government and increasing its influence in our lives. Reagan talked a good game about small government but couldn't even eliminate a single agency. For example the department of education, which he pledged to abolish, was much bigger when he left office than when he came in. How would these kinds of cuts be accomplished in the current political atmosphere?

Why would the agencies evolve under a 25 year plan? What would prevent the bureaucrats from simply sitting on top of their stagnant agencies to protect their dwindling power bases?

What kinds of rewards would be offered? Would you offer bonuses to the directors of these agencies? Wouldn't you be giving them an incentive to cut costs and provide fewer services so that they can operate under budget and be given rewards?

1. Realistically it would have to be a group of people coming into power with similar ideas on how to reinvent how we as Americans govern ourselves. Likely it would be once the financial costs of poor financial planning starts to effect the voting public. I don't think it's possible now, but in 10 or 15 years when the costs of services increase dramatically due to all the baby boomers.

2. Like I said in my first response it would be a different way of thinking, one that put people with this idea into office. So, by that token votes would determine the action of legislators who would then oversee the department heads. It's realistically in the voters hands if they wield their vote correctly, but a strong group could also keep this going or destroy it if they kept it out of the public eye like they have been historically.

3. In a perfect world one of two things would happen: the president would name successful heads of agencies to global roles, or the private sector would recruit successful managers. Both offer pay increases, but besides that the managers would be rewarded by keeping their jobs.

Part 2: Freeze Department Budgets
-The strategy in this move is to use time, limits, and investment (which I will get to later) to increase efficiency in handling constituencies needs. Quasi socialism isn't inherently bad, people simply want whatever works.
-All departments would be given notice that their budgets would freeze, and not be re-adjusted for at least 25 years, and the program would work in 25 year periods.
-In essence, the agencies take on living characteristics where they must evolve or die. Automation, proper use of technology, and merit based hiring by necessity becomes the standard.

I think instead of freezing department budgets in dollar amounts, you would need their budgets to be fixed to the rate of inflation. With inflation averaging around 3% annually, a 25 year "freeze" would actually result in a net loss of 51.86% over that entire period of time. To put that in perspective, the Department of Defense costs about $548.8 billion per year. In 25 years with inflation accounted for, the DOD would only be funded the equivalent of $284.6 billion in today's dollars...

I think instead of freezing department budgets in dollar amounts, you would need their budgets to be fixed to the rate of inflation. With inflation averaging around 3% annually, a 25 year "freeze" would actually result in a net loss of 51.86% over that entire period of time. To put that in perspective, the Department of Defense costs about $548.8 billion per year. In 25 years with inflation accounted for, the DOD would only be funded the equivalent of $284.6 billion in today's dollars...

You guys are getting hung up on that part.

Any savings would go into investments, loans, and interest would be gained from those investments above inflation.

Tax receipts would gradually increase with inflation (at about 3% annually) until they met and exceeded the fixed federal budget.

At year 7 we would begin seeing a balanced budget (actually a small $9 billion dollar surplus). However at that point we would be at a maximum national debt of $10.7 trillion.

It looks like at year 27 we would finally pay off the accumulated national debt (it would be 2033), and assuming EVERYTHING is held constant (which means most baby boomers won't get most of their entitlements) it could conceivably work...

EDIT: again, this would basically have the effect of cutting our government in half (meaning a lot of people will suffer during this 27 years), and would likely kill the economy since it would remove $10.7 trillion from the economy in a relatively short period of time without providing any additional government spending (normally when the government takes your money it at least spends it on something and helps contribute to the overall economy). We have really shot ourselves in the foot with this national debt, and I think there will be a lot of suffering before it is paid for.

Another problem with this is that it presupposes a Congress who will pass a budget, which operates under the budget constraints of these agencies.

__________________I can't believe how strange it is to be anything at all

It is no crime to be ignorant of economics, which is, after all, a specialized
discipline. But it is totally irresponsible to have a loud and vociferous opinion
on economic subjects while remaining in this state of ignorance.
--Murray Rothbard

What savings?
It looks like at year 27 we would finally pay off the accumulated national debt (it would be 2033), and assuming EVERYTHING is held constant (which means most baby boomers won't get most of their entitlements) it could conceivably work...

And right here we have the basic failure point of such an idea. Millions of Baby Boomers would get screwed out of their various entitlements. As one of the stronger political entities in the nation, I doubt removing entitlements would go over well with them.

As a pure classroom idea, it's all fine and good, but let's face reality here - people don't want a small government or even a cheap government, they want a government that's cheap (or preferably, free) for them and provides them the most benefits. Every time an old person writes a letter in support of social security, they aren't doing it on behalf of others, they do it to keep THEIR check coming. Unless there is a fairly significant shift in our view of the function of government, you won't get away with trimming much fat, because that fat is there to make someone happy.

At some point we as a country must makes moves to re-establish some sense of fiscal responsibility.

haha, I'm glad you shot back with that one.
It seems like a lot of decent legislation doesn't get passed because there always seems to be one little glitch, and instead of working together to revise it, it gets shot down and nothing gets done for the problem.

At some point we as a country must makes moves to re-establish some sense of fiscal responsibility.

It isn't that it's a bad idea at heart. The problem lies in the fact that there are too many people who depend on the government at it's current size to let any radical reduction of government expenditures take place. Such a change could take place ONLY if the public shifted it's view of the government as an entity that provides for the common good to the more traditional entity that protects the comman good. If this change in perception were to occur, THEN you could elect the candidates necissary to enact such radical (even it is reasonable) legislation.